Penerbangan Malaysia Berhad

PMB-MALAYSIA AIRLINES To Acquire 6 Airbus A380

10 January 2003 - Penerbangan Malaysia Berhad (PMB), the holding company of Malaysia Airlines, today signed a Memorandum of Understanding (MOU) with Airbus to acquire six Airbus A380-800 passenger aircraft for delivery scheduled to commence in 2007.

A corresponding lease agreement for the aircraft would be agreed to between PMB and Malaysia Airlines in accordance with the guidelines of the Corporate and Contractual Governance Code. The Code, that was part of the Malaysia Airlines Financial Restructuring announced on 30th July 2002, defines the roles of PMB and Malaysia Airlines as the asset owner and asset operator respectively, in various aspects of running the national airline, including in the area of fleet planning and acquisition.

Dato’ Gumuri Hussain, the Managing Director and Chief Executive Officer of PMB said “This is a landmark transaction that sees the new business model of the national carrier in action. We have worked closely in our roles as asset owner and operator to first determine our long-term aircraft requirements and secondly to quickly negotiate attractive conditions to acquire the aircraft. With a sovereign-backed credit standing, we believe there would be further benefits from financing this through PMB. In accordance with the Governance Code, the leases would be struck on an arms-length basis, while at the same time, it is also the intention of our business model that we share some of these benefits with Malaysia Airlines, our operator and 69% subsidiary”.

The 555-seater A380 uses leading-edge technology will provide up to 20 per cent lower operating costs per seat kilometre and up to 15 per cent more range than the largest aircraft flying today. With a full upper deck, 49% additional cabin space and around 35% more seats compared to existing offerings, the A380 is expected to raise the benchmark for leading-edge customer experience and comfort in years to come.

Dato’ Md Nor Yusof, the Managing Director and Chief Executive Officer of Malaysia Airlines highlights that “With this acquisition, we believe Malaysia Airlines would be even better equipped to sustain and improve on our position as a premier carrier with the latest product offering. We are very well positioned in the region and combined with the encouraging traffic growth on our flagship long-haul routes, slot constraints in our key destinations and the A380’s expected cost advantages, we believe there is a strong economic rationale for the addition to the fleet, even more so by the time we take delivery in 2007”.